BILL NUMBER: SB 164	CHAPTERED  09/23/99

	CHAPTER   471
	FILED WITH SECRETARY OF STATE   SEPTEMBER 23, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 23, 1999
	PASSED THE SENATE   AUGUST 31, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	AMENDED IN ASSEMBLY   JUNE 10, 1999
	AMENDED IN SENATE   MARCH 17, 1999

INTRODUCED BY   Senator Johnston
   (Principal coauthor:  Assembly Member Honda)
   (Coauthors:  Senators Baca, Bowen, Costa, Escutia, Figueroa,
Hughes, Sher, Solis, Speier, and Vasconcellos)
   (Coauthors:  Assembly Members Alquist, Aroner, Kuehl, Nakano, and
Steinberg)

                        JANUARY 11, 1999

   An act to add Section 69505 to the Education Code, to add Section
17156.5 to the Revenue and Taxation Code, and to amend Section
11008.17 of the Welfare and Institutions Code, relating to reparation
payments, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 164, Johnston.  Reparation payments:  state income tax
exclusion and Medi-Cal and state student financial aid eligibility.
   (1) Under existing law, and to the extent required by federal law,
certain reparation payments made by the federal government to
redress injustices done to United States citizens and resident aliens
of Japanese ancestry interned during World War II are not considered
income or resources for the purposes of determining eligibility for
Medi-Cal and public assistance benefits or the amount of those
benefits.
   This bill would, to the extent that federal financial
participation is available, prohibit reparation payments made by the
Canadian government to persons of Japanese ancestry interned in
Canada during World War II from being considered as income or
resources for purposes of determining eligibility to receive Medi-Cal
benefits or the amount of these benefits.  It would, to the extent
that federal financial participation is available, where reparation
payments have been converted to another form, prohibit amounts of
otherwise excess nonexempt resources equal to the amount of these
reparation payments received by the individual or inherited by the
spouse of the individual, or both, from being considered as resources
in determining eligibility for Medi-Cal.  It would also, to the
extent that federal financial participation is available, exempt
reparation payments and amounts of resources equal to the amount of
reparation payments, received by the deceased Medi-Cal beneficiary or
inherited by the deceased spouse of that beneficiary, or both, from
estate recovery by the State Department of Health Services.
   Since eligibility for Medi-Cal benefits is determined by county
welfare departments, this bill would impose a state-mandated local
program on counties implementing its provisions.
   (2) Under existing law, specified resources are exempt from
consideration in determining an applicant's financial need for state
student assistance.
   This bill would also require that, to the extent that federal
financial analysis methodology incorporates this exemption, income
received as reparation payments from the federal government on or
after October 1, 1990, or as reparation payments from the Canadian
government, shall not be considered in determining an applicant's
financial need for state student assistance.
   (3) The existing Personal Income Tax Law provides for various
exclusions from gross income.
   This bill would also exclude from gross income reparation payments
made by the Canadian government to persons of Japanese ancestry
interned in Canada during World War II.
  (4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
  (5) This bill would declare that it is to take effect immediately
as an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 69505 is added to the Education Code, to read:

   69505.  (a) To the extent that federal financial analysis
methodology incorporates this exemption, income received as
reparation payments paid pursuant to federal law on or after October
1, 1990, for the purpose of redressing the injustice done to United
States citizens and resident aliens of Japanese ancestry who were
interned during World War II shall not be considered in determining
an applicant's financial need.
   (b) To the extent that federal financial analysis methodology
incorporates this exemption, income received as reparation payments
paid by the Canadian government for the purpose of redressing the
injustice done to persons of Japanese ancestry who were interned in
Canada during World War II shall not be considered in determining an
applicant's financial need.
  SEC. 2.  Section 17156.5 is added to the Revenue and Taxation Code,
to read:
   17156.5.  Gross income does not include any amount received as
reparation payments paid by the Canadian government for the purpose
of redressing the injustice done to persons of Japanese ancestry who
were interned in Canada during World War II.
  SEC. 3.  Section 11008.17 of the Welfare and Institutions Code is
amended to read:
   11008.17.  (a) To the extent required by federal law, amounts paid
pursuant to any federal law enacted in 1988 to provide reparation
payments to redress the injustice done to United States citizens and
resident aliens of Japanese ancestry who were interned during World
War II shall not be considered as income or resources for purposes of
determining eligibility to receive Medi-Cal benefits or public
assistance benefits or the amount of those benefits.
   (b) To the extent that federal financial participation is
available, amounts paid by the Canadian government to provide
reparation payments to redress the injustice done to persons of
Japanese ancestry who were interned in Canada during World War II
shall not be considered as  income or resources for purposes of
determining eligibility to receive Medi-Cal benefits or public
assistance benefits or the amount of those benefits.
   (c) To the extent that federal financial participation is
available, where the reparation payments described in subdivisions
(a) and (b) have been converted to another form, amounts of otherwise
excess nonexempt resources equal to the amount of these reparation
payments received by the individual or inherited by the spouse of the
individual, or both, shall not be considered as resources in
determining eligibility for Medi-Cal.
   (d) To the extent that federal financial participation is
available, reparation payments described in subdivisions (a) and (b),
or where the reparation payments described in subdivisions (a) and
(b) have been converted to another form, amounts of resources equal
to the amount of these reparation payments, received by the deceased
Medi-Cal beneficiary or inherited by the deceased spouse of that
beneficiary, or both, shall be exempt from estate recovery by the
State Department of Health Services pursuant to Section 14009.5.
  SEC. 4.  Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
costs mandated by the state, reimbursement to local agencies and
school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
  SEC. 5.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order that recipients of reparation payments may fully benefit
from the provisions of this act as soon as possible and so redress an
unfairness at the earliest possible time, it is necessary that this
act take effect immediately.
